U.S. Auto Sales Jumped in January

By WSJ Staff

Auto makers got off to a fast start in January as new-vehicle sales surged, with several manufacturers reporting big gains over the same month a year ago.

Chrysler Group LLC led the way as its January U.S. sales leapt 44% to 101,149 cars and light trucks while General Motors Co., so far, was the only major auto maker to report a decline over a year ago.

GM’s January sales fell 6%, reflecting deep discounts and new models that fueled sales gains a year ago. It has since cut back on incentives. GM’s profitable big pickups lost ground last month. Sales of the Chevy Silverado—GM’s top-selling vehicle—fell 4.7% and the GMC Sierra dropped 10.4%. Cadillac brand sales fell 29% from a year ago, with every model in the brand posting declines.

January sales of GM’s battery-powered Chevrolet Volt, at 603, were less than half the December total. GM sales chief Don Johnson blamed slow Volt sales on a U.S. safety investigation into whether the car’s battery posed a potential fire risk. U.S. safety officials last month cleared the Volt and said the car poses no unusual risk of fire.

Mr. Johnson said the Volt was “clearly affected” by the probe and that GM made sure to keep Volt production in line with demand and will “take this one day at a time.” Chief Executive Dan Akerson last month backed off a plan to produce and sell 45,000 of the cars in the U.S. this year while the company re-evaluates its strategy with the car.

Volkswagen AG’s namesake brand sold 27,209, a 48% increase for its best January performance since 1974, according to the company. VW announced yesterday that it was adding 200 jobs to its Chattanooga, Tenn., plant to meet expanded demand. Nissan Motor Co. said U.S. sales rose 10.4% to 79,313.

Ford Motor Co. also said its U.S. sales rose 7.3% to 136,294 cars and light trucks. Ford was boosted by strong sales of its Focus compact car, on which the auto maker began offering extra cash incentives in January to help lower excess inventories.

The positive momentum should continue in the first quarter. Overall economic growth should continue in the 2% to 3% range,” said Jenny Lin, a Ford economist, in a conference call today.

Chrysler, which also reported a year-end net profit of $183 million today, benefitted from an 81% increase in sales of its Chrysler brand, where redesigned versions of the Chrysler 300 full-sized sedan and the 200 mid-sized sedan have been popular.

The Auburn Hills, Mich.-based company estimated the U.S. industry selling rate, adjusted for seasonal selling patterns, would come in at 13.8 million, which would make it stronger than any month in 2011. Last year the rate was 12.6 million in January.

Car shopping research site, Edmunds.com, is forecasting U.S. sales of estimated 866,655 vehicles, which would be an increase of 5.8% and a sales rate of 13.4 million units, well below the level predicted by Chrysler.

For January, Chrysler said it sold 101,149 vehicles. Truck sales rose 25% from a year ago, while car sales more than doubled.